Organizing Financial Paperwork

Organize Your Finances
Organize Bill Paying

Organizing financial paperwork efficiently and effectively does not have to be a dreaded chore. With the right filing system and a proper way to keep records organized, no home or business needs to fear any forgotten financial matters.

Steps to Organizing Financial Paperwork

Whether you're at home or the office, there are several clear steps needed to organize your financial paperwork.

  1. Determine the purpose of the organization: Businesses, self-employed individuals and family households need to track expenses and other financial documents differently. An organizational system for a small business will be significantly different than one for a college savings plan.
  2. Create a filing system: The best filing system is one that works for you, one that you can understand and use effectively. For some people, a system that files all paperwork in monthly folders is best, while other people may prefer systems categorized by the type of record such as utility bills, income paperwork, etc. Another popular system is to organize by documents that require immediate attention, short-term storage documents and long-term financial paperwork. Many organization systems can be improved by color-coding.
  3. Sort materials and file them appropriately: This is the perfect time to purge files of unnecessary documents such as expired insurance policies, unneeded receipts, or outdated paperwork. For some individuals, using a highlighter or other way to note the most important documents is a valuable technique for organizing financial paperwork.
  4. Keep up on the filing: It is easy to let papers accumulate over time, but if you file your paperwork immediately you are less likely to be overwhelmed by cluttered files. This is especially important for businesses or other complex filing systems as well as for anyone who dreads filing tasks.
  5. Purge files regularly: Over time, most financial documents will become outdated and no longer need to be kept. Shred any documents with personal information such as policy numbers, contact information, credit card numbers, or other details that could pose security risks.

Financial Organization Tips for Business and Home

Tips for Businesses

Even a small business may have complex financial records to file, depending on the type of business and what services it provides. To keep business finances in order:

  • Track all aspects of the business, including sales, purchases, payroll, clients, tax payments, employee health care expenses and office supplies.
  • Establish business expense and income accounts that will not be mixed with personal finances.
  • Take extra care when filing information for city, state and federal taxes.
Colored files can help.
  • Consider hiring a financial accounting firm or private accountant for large or complex businesses.

Tips for Home Finances

Every family can benefit from good financial organization and budgeting. To keep family finances organized:

  • Create a family budget that tracks all income and spending, including utility bills, groceries, health care, entertainment, travel, mortgages and more.
  • Keep a file for savings statements for all bank accounts, retirement plans and other savings options.
  • Store financial files in an easy-to-access place to prevent procrastinating when filing is needed.
  • Keep credit card statements, mortgage paperwork, pin numbers, check stubs and other potentially sensitive paperwork in a secure place.
  • Notify all creditors - loan companies, credit cards, etc. - immediately of any change in phone number or address to prevent lost statements and other problems.

Benefits of Electronic Organization

For some people, electronic organizing is best. Financial paperwork is easy to organize electronically, whether through a detailed spreadsheet or finance program or simply by organizing online accounts. The benefits of organizing financial papers electronically include:

  • Math: Many programs will automatically perform calculations on entered data, minimizing the risk of a mathematical error that could lead to financial problems.
  • Speed: Online banking statements and electronic payments can be taken care of more quickly than traditional printed paperwork.
  • Space: By organizing documents on a computer instead of physical files, you can save a lot of space in a small office or crowded filing cabinet.
  • Security: Most electronic programs have safeguards to prevent accidental deletion and electronic files are less likely to become inadvertent trash. For further security, always back up files after making changes and keep online passwords secure.

Why Organize?

It is critical for financial records to be organized effectively, whether they are business payroll and expenditure records, personal credit card statements and mortgage documents, or student loan agreements and shopping receipts. Being financially organized can help both individuals and businesses with:

  • Taxes: Organized records make it easy to find tax deductible receipts, quarterly tax payment histories and other necessary documentation for painless filing.
  • Budgeting: By knowing where all the financial records are and how money is being spent, creating a practical budget is easy.
  • Estate Planning: Whether planning a trust for heirs or setting up retirement accounts, organized financial records are a great help.

Save Time, Get Organized

Organizing financial paperwork, whether by creating a filing system that works for you or choosing to file paperwork electronically, can help make taxes, budgeting and other financial projects less stressful and more convenient to complete without hassle.

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Organizing Financial Paperwork